Howard Tullman, former CEO of 1871. Earlier this year, Tullman said he planned to step down as chief of the city’s high-profile tech hub once a successor is found. Tullman’s involvement with 1871 won’t end — he’ll stay on as a board member and a member of the executive committee — but he won’t say what’s next. Tullman hinted that there are “a couple” of new initiatives he plans to roll out next year, but he declined to share any details.
Friday, December 29, 2017
Thursday, December 28, 2017
New INC Magazine Blog Post by 1871 CEO Howard Tullman
In a Year of Crypto-Craziness and A.I. Everywhere, It's Time for
a Little Caution
These new
technologies have generated the headlines, but don't get sucked in by their
allure.
CEO, 1871@tullman
As we are about to begin the new year, I was reminded of the old
adage that the biggest mistakes in business are made during the good times, not
when the going gets rough. And, although it may just be me and Taylor Swift who
think this, I'd say that from the perspective of the stock market and its
reflected glow-- which has certainly made it easier for startups to come
by cheap capital and especially easy for a bunch of really bad ideas and crappy
businesses to get funded-- these are pretty heady days. A fair
number of financial folks are feeling pretty fat and happy, too. So, I'd say
now's the time for a word or two of caution.
First, do whatever you want about investing in cryptocurrencies,
but if you insist on doing it, do it directly and for your own account. Don't
be stupid enough to pay someone to help you become a bitcoin miner (whatever
you think that means these days) or let anyone convince you that there's
anything easy or trivial or even well understood about the entire process.
Stick to something you know something about. And, if you're still on the fence
and your greed still threatens to overwhelm your good sense, there's another
rather simple test you can use when these bozos try to foist their
"farms" on you and rent you a piece of the future. Ask them why
they're still hawking this junk if they're so prescient and far ahead of the
crypto curve. Or, more simply stated, if they're so smart, how come they're not
already rich. The guys who made the most money in the Gold Rush didn't strike
gold; they sold deeds to the dopes and shovels to the suckers. Try not to be
either in the year ahead.
Second, on the same subject,
don't do your friends and especially your family the favor of helping them into
this particular swamp. FOMO fever is rampant, but just remember that you barely
understand what's going on and you have absolutely no business trying to talk
someone else (who maybe can't focus on the likely prospect of, or afford, the
eventual losses) into jumping into the puddle with you. I get that misery loves
company, but you'll have to live with some of these people for the rest of your
life-- if they don't kill you first. The pain of all those future lectures
isn't worth the few moments of pride you get for being "in the
know." I've already said my piece on the merits of the whole bitcoin subject and
I sold my bitcoins a while back (once I figured out how to find them and
re-gain access to my account) when I was reminded of another old market adage:
you never lose money taking a profit too soon. Sure, you may leave some
shekels on the table, but unlike the pigs who will eventually get stuck holding
the empty poke, you'll have plenty of dry powder for next time.
Third, nobody you know actually knows anything about artificial
intelligence. Notwithstanding that fact, 99% of the startups you'll see
business plans and proposals from over the next year --along with all of those
painfully pivoting to the proposition as well-- will tell you that they do.
They don't. The last thing you want to spend your time and money on is
funding their on-the-job-training while they try to figure things out. A.I. is
not business process automation. It's not predetermined pattern recognition.
It's not accelerated data retrieval. Building a behind-the-scenes bot or a
series of macros or tagging a bunch of pix as a library for future image
recognition isn't A.I. Also, the fact that your CRM program knows my shoe size
doesn't constitute machine learning.
This is another one of those conversations in which it's hard to
know where to start complaining because, in so many of these cases, even if
they had the remotest idea of what they were talking about, the tools and
technologies that they're bragging about have little or nothing to do with the
business they used to say they were in and maybe even less to do with where
they say they're heading. They spew all these annoying acronyms and exaggerate
their exactitude with a bunch of assertions that are really fantasies of false
precision.
We used to say that, whatever your engineers think, it's clear
that not every product, service or application needs to be larded up with an
email function for no good reason. Your dog doesn't need email and it's not
really clear to me (while we're just talking here) that an 8-year-old needs a
Facebook account either. Sadly, we're very likely to see these things happen.
And, today, I feel that we are seeing the same bad behavior and all the
associated BS with virtually every company (young and old) now claiming that
their product or service incorporates powerful machine learning and A.I.
systems. Here's a flash: if you have to tell it what to do, it might be
augmented intelligence or a good supplementary tool for decision support, but
it ain't A.I. when the primary "I" in the equation is you.
Some of these claims may be real and accurate, but a bunch are
just smoke and mirror stories that are likely to give us all the bad name. Can
we put a stake in it before the conversations go completely crazy? It'll save
us all a lot of headaches and heartaches down the line. My barber needs
predictive A.I. tools like a fish needs a bicycle.
Finally, while you are changing
your smoke alarm batteries, change your passwords to something secure, or get a
password security system like Keeper in
place for your business because getting hacked these days isn't a matter of if,
it's just a question of when. Happy Healthy New Year.
Wednesday, December 27, 2017
Friday, December 22, 2017
Thursday, December 21, 2017
Wednesday, December 20, 2017
Outgoing 1871 CEO Howard Tullman adopts wait-and-see approach to net neutrality
Outgoing
1871 CEO Howard Tullman adopts wait-and-see approach to net neutrality
Outgoing
1871 CEO Howard Tullman speaks at the City Club of Chicago on Dec. 19, 2017.
Outgoing
1871 CEO Howard Tullman took a victory lap with
a speech at the City Club of Chicago on Tuesday — but if
Chicago’s techies were expecting their fast-talking champion to fire a parting
shot at the FCC’s decision to rescind net neutrality rules, they
were mistaken.
Tullman, who announced his decision in August to step down after four years at
the helm of the startup tech hub, was asked by an audience member
how 1871 could mitigate against any harm caused by the decision to scrap Obama-era
regulations that treat broadband internet service like a utility and prevent
broadband providers from discriminating between websites.
But he seemed to surprise his interrogator by
sitting on the fence on the partisan issue.
“I was just at a meeting in New York with about
300 technologists and CEOs, and about half the room was on either side of this
conversation, so we don’t know,” Tullman said.
“I don’t think it’s really a black-and-white
situation. … Honestly, net neutrality is fairly new — we got along without
those kinds of regulations for the first 20 years of the internet, so I think
it’s an open question. We’ll just have to see how things develop.”
Asked what he plans for his next act, the
72-year-old entrepreneur was coy, joking that he has been telling pals he will
be “getting into inflatable pool furniture” to shut them up.
Despite his efforts to winnow his enormous art
collection (200 pieces were recently auctioned off, and he plans to sell more),
he admitted to Chicago Inc. that he hasn’t been able to stop buying paintings.
And his wife, big-time PAWS supporter Judy
Tullman, said she hasn’t given up on her plan to get Mayor Rahm Emanuel to adopt a dog.
While the Emanuels “are not animal people, I
never give up,” Judy Tullman said, adding that she plans to
keep working on Chicago’s first lady, Amy Rule.
Tuesday, December 19, 2017
Monday, December 18, 2017
Friday, December 15, 2017
New INC Blog Post by 1871 CEO Howard Tullman
Does Your Customer Research Prove What You Already Know?
Then it's useless. Sometimes you need to take an indirect approach to find out what your customers really crave. In Japan, Nestlé's coffee business got a jolt by focusing on office behavior, not coffee machines.
Steve Jobs famously said that asking customers what they wanted in the way of a new product or service was a waste of time. He said it was Apple's job to anticipate their needs because "customers don't know what they want until we've shown them." There's been a lot of discussion about whether this means that market research is basically useless or whether it means that the way market research has been used by many businesses isn't helpful, instructive or productive. I'd argue that it's the latter.
I don't think Steve was condemning an entire industry, although he didn't have any great love for gathering or relying upon numbers for numbers sake. His basic disinterest stemmed from the issue that-- way back then and right up to today--too many companies use market research like a drunk uses a lamppost, for support rather than illumination. Or worse yet, they approach it like the guy looking for his lost keys beneath the street lamp because that's where the light is best. Convenient, but not constructive. Comforting, but not convincing or compelling.
And, basically, that's what you're doing if you're designing and deploying your market research to support foregone conclusions and to justify customer assumptions that you've already built into your offerings. If you know what the answers are going to be because you "fixed" the game, then it's not research-- it's redundant window dressing not worth the time, money or effort. It's not an experiment if you already know the results. And if you undertake a mainly CYA exercise to satisfy someone else's fears or anxieties, there are quicker, cheaper and easier ways to deal with these needs. Even medication and mixed drinks are better cures for corporate "concerns" and bureaucratic BS than throwing money away on silly surveys.
On the other hand, if you want to make a sincere effort to use the available tools to get better and smarter about understanding the needs and desires of your existing and potential customers (and to even build on those foundational beliefs to create new needs and drivers), there are some effective ways to go about it. Well-designed field research is absolutely essential when you're focused on incremental and iterative improvements because committed customers are relatively adept at identifying the margins, and in describing and detailing adjacent adjustments and tweaks. Please don't leave these things up to your engineers or you'll be adding useless features and functionality that no one needs. Leave the development of bloatware to the big guys.
When you're looking into "new" as opposed to "next" and when you're trying to cross the chasm and change the game, defining the scope and objectives of your market research efforts is harder. Many experts would tell you that it can't be done by asking your customers. I'd say that it depends on what you ask them and what you're looking for. If your inquiries are oblique rather than obvious, and contextual rather than confrontational (not in the aggressive sense of the word, but simply meaning too direct), I think you can learn a great deal.
I like research that focuses on the 4 Cs: conditions, circumstances, concerns, and community. You're looking laterally and you're trying to learn more about the customers' lives than about their expressed likes and longings. These are different, longer range lenses and they're likely to return data relating to longer term, but much more valuable and substantial opportunities as well.
The innovative products of the future, the ones creating sustainable and valuable new offerings driven by behavioral changes, aren't going to be predicated on new flavors or even fabulous new features. They're going to be ones that address fundamental needs that are often apparent from the outside, but which consumers and customers are often reluctant to address or admit. I saw an interesting example of this process recently in Japan.
Japanese companies have been eliminating office coffee makers. I don't know whether that's about cutbacks or that no one wants to make and wait for an entire pot of coffee, or the new abundance of coffee shops. But this has basically killed the coffee break and, much more importantly, the conversations, collisions, and even some of the social interactions and community that used to be a part of these places. Maybe people still gather at the water cooler for chats, but I doubt that as well.
This is real problem if, like Nestlé, you sell happen to sell coffee makers and coffee. It was clear from Nestlé's research that the employees missed the breaks and the chatter far more than the coffee.
This is real problem if, like Nestlé, you sell happen to sell coffee makers and coffee. It was clear from Nestlé's research that the employees missed the breaks and the chatter far more than the coffee.
So, the CEO of Nestlé Japan decided to build a single-serve coffee maker for offices that lacked their own machines. Importantly, his rollout plan also took into account the real pain point for the target consumers, which was actually the loss of connection and community. The new machine has been a huge success, but not for the reasons that you might expect. In fact, if Nestlé had simply tried to sell machines and cartridges into the many offices that had just dumped their machines, the project would have been a bust. And simply giving away the machines while planning to sell the "razor blades" to the companies wouldn't have worked either because the aggregate weekly costs of the cartridges are not insignificant.
Instead, Nestlé's plan enlisted individual advocates and influencers in each office who "work" for Nestlé, for free, by collecting payments from co-workers each weekly for their coffees and remitting the sums to Nestlé to replenish the cartridge supply. Not only has the connection point been restored, and the community reinvigorated, but the very acts of the collection process have increased the inter-personal interactions and engagement among the participating employees in the program.
Needless to say, there's no way that any traditional front-facing research would have elicited the underlying drivers and real desires of the customers. Even more importantly, it turns out that the real "customers" aren't the businesses themselves, but the individual workers who are drinking the coffee. A standard survey of employers wouldn't have uncovered any part of the problem or helped to determine an innovative and immediate solution to the issue of funding the program.
Customers can't tell you what they don't know--especially if they're not actually the customers who matter.
Tuesday, December 12, 2017
1871 CEO Howard Tullman Appears on Tasty Trade to Present Special Award to Kristi Ross
Howard presented Kristi Ross with a KR puppet from 1871 for her incredible service as an 1871 Board member and mentor
With Howard Tullman's tenure as CEO of 1871 coming to a close, he looks back at some of his favorite moments and memorable startup companies. Howard Tullman, CEO of renowned startup hub, “1871” and visionary, lecturer, educator, writer, art collector, brings his unique view of the business world to the tastytrade audience. You can watch a new Howard Tullman episode live and check out all previous episodes everyday at http://ow.ly/EoyGW! ======== tastytrade.com ======== tastytrade is a real financial network, producing 8 hours of live programming every weekday, Monday - Friday. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 50 original segments, and over 20 personalities, we’ll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. http://ow.ly/EbzUU
Sunday, December 10, 2017
1871 CEO Howard Tullman Honored at Illinois Venture Capital Dinner
HAT REMARKS
I want to start by saying how flattered I am to be honored by
this group of peers and people I’ve admired for decades for their leadership
and contributions to the growth of our entrepreneurial community and to our
city as well. I also want to especially thank Maura and the IVCA team.
Seeing people here from Pritzker, Frontenac, GTCR, MK, KB,
OCA, Origin, and my G2 investors as well is like attending a Reunion Weekend on
steroids. I’m also proud to be invested alongside many of you in such exciting
Chicago-based deals as Spot Hero, Snapsheet, Tock, Xaptum, UpShow, Peanut
Butter, THYNG and KnowledgeHound, among many others, and in a number of your
funds.
And, looking at the amazing list of past honorees, many of
whom have also been friends of mine for decades, I’m grateful to be the latest
in a distinguished line which includes several of our 1871 officers and board
members.
For many years, I was close to both Mayors Daley and I was a
member of the original Tech Advisory Council so it’s especially meaningful for
me to receive this particular award in the name of – as you might say – the
father.
I have also attended this IVCA Dinner for many years (as a
guest of my dear friend Al Kutchins) and I’ve always thought that this was one
of the year’s most important and unique gatherings. It’s a humbling reminder to
see so many familiar faces and remember so many deals that went up, sideways,
or into the toilet over the years. But the good news is that at least we’re almost
all still here to complain about them.
On that note, I want to remember that my first venture deal
was funded by Stan Golder who was one of the giants in this business, who I
miss to this day, and who was a friend, a mentor, and someone it was an honor
and a privilege to know. The bag boy on that deal was a guy named Bruce Rauner
– not sure what became of him.
Finally, I will also admit that I’ve rarely stayed all the
way through dessert at these events, but tonight I hope to make an exception.
I said when I was interviewed about the award that what I
thought distinguished and set Chicago’s investment community apart from the
rest was the amazing extent to which we see various investor groups working collaboratively
together here rather than purely as adversaries and competitors. I think this is
a very healthy way to make more resources and connections (beyond mere cash)
available to both startups and growth businesses and to grow the pie as well. In 1871 alone, we have half a dozen early
stage venture funds and co-investments seem to happen on a monthly basis. This
is great for the startups and also great for the city. We need to keep it up.
But I also want to inject a word or two of caution. You get
to do that once you’re over 70 years old. It turns out that raises aren’t
revenue (never have been) and that invoices are still more important in the
early days than additional investments. I think that – driven in part by the
abundance of media covering digital businesses these days – and the omnipresence
of social media as well - we’re seeing an unfortunate tendency to celebrate too
soon.
Let’s give our startups (and the dough) a little time to rise
before we bring out the candles and start cutting up the cake. I can think of a
dozen no-more businesses that were once toast of the town and which are now just
toast. We brag a lot about being a
revenue-first town, but – especially from where I’m sitting – I feel like we’re
getting a little too carried away. Let’s rob a few trains before we start
splitting up the loot.
And I want to make one other observation which I feel that I
need to credit in part to Jason Fried of Basecamp who once said that “your dog
doesn’t need email”. His point was that not every product, service or
application needed to be larded up with an email function for no good reason,
but it was sadly very likely to happen.
Today, I feel that we are seeing the same issue and
associated BS with virtually every company now claiming that their product or
service incorporates powerful machine learning and AI systems. Building a
behind-the-scenes bot or a series of macros or tagging a bunch of pixs as a library
for future image recognition isn’t AI and the fact that your CRM program knows
my shoe size isn’t machine learning.
Some of these claims may be real and accurate, but a bunch
are just smoke and mirrors likely to give us all the bad name. Can we put a
stake in it before it goes completely crazy? It’ll save us all a lot of
headaches and heartaches down the line.
So, thanks again for the award – all the best for the
holidays – and I wish each of you a Happy, Healthy and Prosperous New Year.